It was reported on 12 December, 2013 that the Canadian dollar was enjoying a brief respite after weeks of losses due to the change in the price of crude. Following yesterday’s report here, it was noted that the West Texas Intermediate energy market had reached a six week high based on indications that the US crude stockpiles had fallen below previously believed levels.
Readers are reminded that Canada’s economy is closely tied to the oil industry, as crude represents the nation’s largest export. Employment and thus consumer spending and growth are considerably dependent on the price of oil.
Analysts note that prices of crude continue to fluctuate constantly over speculation on the US stockpiles. In recent months, the value of crude was significantly depressed as industry reports led traders to believe that the reserves were unusually high, lowering demand and prices. During this period, there were times of volatility when some experts expressed their speculation over the accuracy of the reports.
As such, analysts believe that the price of crude is likely to fluctuate in the coming weeks as the market adjusts to the new data, and as additional reports come out with contradictory information.
Stanley Fischer Slated To Replace Yellen as Vice Chairman at Fed
It was reported today on 12 December 2013 that former Bank of Israel Governor Stanley Fischer has been offered the position of vice chairman of the US Federal Reserve. If selected, Fischer would replace Janet Yellen, the current nominee for the top seat at the Fed.
Analysts note that many public commentators and experts have expressed their support for Fischer, praising his experience, management style, and ability to act with a level head during a crises. Fischer garnered praise in guiding Israel through the financial crises during his tenure there.
Should the reports that Fischer has been offered the job indeed prove to be accurate, analysts believe that it will help to improve confidence on the USD amongst investors. As such, traders are advised to watch for continued rises in the value of the dollar as this information is verified and other positive growth reports are delivered.
Concerns Over Inflation on Aussie as Kiwi Eyes Rate Adjustments
Worries over inflation are said to have arisen in Australia following reports from December 11, 2013 that the Aussie had fallen further after the release of yesterday’s dismal employment figures. Moreover, the spike in rapid growth in the US is believed to have added further pressure to the battered currency.
According to the report that was issued yesterday, while a larger number than expected of jobs were created during November, the unemployment rate rose to the highest levels since 2009. Many experts have expressed that despite the losses to the Aussie, they believe that the value is still growing too fast, causing many to worry that inflation may overtake the Australian currency.
For its part, New Zealand may look to step away from stimulus as the Kiwi has risen considerably. Analysts note that the currency has already gained favor with global traders as it has become more attractive. As the pressure of inflation appears to be growing, some inside of New Zealand’s Reserve Bank have hinted that they may attempt to raise the interest rates so as to stay within the confines of their stated growth goals.
Analysts assess that over the short to medium term, these two currencies are likely to continue on their current paths, with the Aussie losing while the Kiwi rises. Traders are advised to watch for potential policy moves by the respective governments as they strive to influence their currencies and inflation.